Correlation Between Grand Baoxin and Group 1
Can any of the company-specific risk be diversified away by investing in both Grand Baoxin and Group 1 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grand Baoxin and Group 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Baoxin Auto and Group 1 Automotive, you can compare the effects of market volatilities on Grand Baoxin and Group 1 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grand Baoxin with a short position of Group 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Baoxin and Group 1.
Diversification Opportunities for Grand Baoxin and Group 1
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grand and Group is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grand Baoxin Auto and Group 1 Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 1 Automotive and Grand Baoxin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grand Baoxin Auto are associated (or correlated) with Group 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 1 Automotive has no effect on the direction of Grand Baoxin i.e., Grand Baoxin and Group 1 go up and down completely randomly.
Pair Corralation between Grand Baoxin and Group 1
If you would invest 41,051 in Group 1 Automotive on September 15, 2024 and sell it today you would earn a total of 1,659 from holding Group 1 Automotive or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grand Baoxin Auto vs. Group 1 Automotive
Performance |
| Timeline |
| Grand Baoxin Auto |
| Group 1 Automotive |
Grand Baoxin and Group 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Baoxin and Group 1
The main advantage of trading using opposite Grand Baoxin and Group 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Baoxin position performs unexpectedly, Group 1 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Group 1 will offset losses from the drop in Group 1's long position.| Grand Baoxin vs. Group 1 Automotive | Grand Baoxin vs. Lithia Motors | Grand Baoxin vs. AutoNation | Grand Baoxin vs. Sonic Automotive |
| Group 1 vs. Penske Automotive Group | Group 1 vs. Lithia Motors | Group 1 vs. AutoNation | Group 1 vs. Asbury Automotive Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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